FCC Chief Talks on Bankrupt
Companies
Date :
Fri, 11 Feb 2000 7:50:13 PST
From :
C-ap@clari.net (AP / KALPANA
SRINIVASAN, Associated Press Writer)
Keywords :
Misc US Govt, Nextel Communications,
tick=NXTL
WASHINGTON (AP) -- The federal government is making plans for
a second auction of wireless licenses held by a bankrupt company, but it
still needs a favorable court decision to proceed.
It is the latest twist in a protracted legal battle between the Federal
Communications Commission and NextWave Telecom, which bid more
than $4 billion for wireless licenses in a federal auction several years
ago and later filed for bankruptcy.
The company recently agreed to pay its debt in full. But the
commission wants that portion of the airwaves back, saying that under
agency rules, NextWave's licenses were canceled automatically when it
failed to meet its payment deadlines.
A New York bankruptcy court earlier this month rejected the
commission's bid to take back NextWave's licenses for a second
auction.
That decision was appealed by the FCC to the U.S. Court of
Appeals for the 2nd Circuit, which previously had reaffirmed the
commission's jurisdiction over the licenses.
On Thursday, the appeals court said the commission canbegin
preparing for the second auction in July of the licenses, while the court
makes its decision. The FCC still needs a favorable ruling from the court
for the auction to go forward.
Meanwhile, at a hearing Thursday, FCC Chairman Bill Kennard told
senators that taxpayers stand to lose billions of dollars -- and the
promise of new communications services -- if valuable government
licenses become tied up in bankruptcy court.
''Spectrum belongs to the American public. It's a national resource,'
Kennard told the Senate Budget Committee.
Allowing bankrupt companies to hold on to the licenses -- and
eventually pay only a portion of what they bid -- undermines the entire
process, Kennard said. He again advocated for legislation that would
ensure the government gets back licenses from companies that file for
bankruptcy. Sen. Judd Gregg, R-N.H., and others have pushed for such
measures in the past.
Because of the increasing demand for wireless voice and data
services, the NextWave licenses may be worth much more now. Mobile
phone company Nextel Communications has indicated that it would bid
as much as $8 billion if the licenses were put back on the auction block.
Gregg said Americans are taking a hit when NextWave and others
bring licenses into bankruptcy proceedings.
The company ''is trying to beat down the taxpayers by going into
bankruptcy court,' Gregg said.
NextWave officials rebuffed any suggestion that they filed for
bankruptcy in order to reduce what they owed the government. They
instead blamed FCC license policy for their financial troubles.
Raymond Dolan, chief operating officer for NextWave, also
chastised the commission for not accepting the company's offer to pay
for the licenses, so they could be put to use to deliver wireless services
to consumers.
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